DEA tells Walgreens: Hand over customer files

Customer files from Florida pharmacies, details on bonuses given to pharmacists, and two years' worth of internal correspondence were among the mountainof data the U.S. Drug Enforcement Administration subpoenaed from Walgreens this year, federal records show.

When agents served a subpoena in April on a Walgreens distribution center in Jupiter, the DEA requested customer files from 14 Walgreens stores, including pharmacies in Orlando, Oviedo and Clermont.

The DEA, which subsequently banned that distribution center from dispensing controlled substances to its pharmacies in Florida and on the East Coast, used the items to build its case against the national chain.

Walgreens is fighting that ban in a federal appeals court, but the company has also embarked on another legal battle: It has asked a federal judge to force DEA to return the highly-sensitive,private documents the company inadvertently submitted as part of the investigation.

Last summer, when Walgreens officials turned over more than 80 megabytes of data — equivalent to thousands of pages of documentation — the company said it included two emails that are protected by attorney-client privilege.

What those documents containis not publicly known. But Walgreens said in court documents that the DEA relied, in part, on detailsin that privileged material when it issued the immediate suspension order Sept. 14 against the Jupiterdistribution center.

Last month,after officials realized the documents were erroneously handed over to the DEA, the company requested the federal drug agency return the items. They have not been returned, according to the court filings.

When asked about the recent legal filings, Walgreens spokesman Jim Graham responded by email: "Throughout the course of the inquiry, we have sought to cooperate and work with the DEA."

DEA officials would not comment.

Email exchanges between Walgreens' attorneys and the DEA show that the pharmacy chain asked the federal agency on Sept. 17 to withdraw the immediate suspension order, and asked that if the DEA was inclined to reissue it, "to do so without reference to the previously identified privileged material."

DEA has not released the immediate suspension order, which is issued when a business is characterizedas an "imminent danger" to the public. The DEA has said the Jupiter center has been the single-largest distributor of oxycodone products in Florida since 2009.

DEA's measures are among the latest efforts to curb the prescription drug epidemic in Florida. Earlier this year, the federal agencybanned two CVS stores in Sanford from dispensing controlled substances, and also targeted Cardinal Health, one of the nation's largest wholesale-drug distributors with a facility in Lakeland.

Now, Walgreens is asking a federal judge in Virginia to compel the DEA to return, sequester or destroy the privileged items.

While attorneys battled to get the private documents back, Walgreens asked the U.S. Court of Appeals for the District of Columbia last week to intervene and vacate the DEA's immediate suspension order against the distribution center.

In that case, Walgreens said DEA is using outdated statistics on oxycodone sales at its pharmacies and hasn't provided evidence that the distribution center is an "imminent danger." Walgreens said DEA is ignoring more recent data and the fact the pharmacy chain voluntarily took substantial steps to address concerns about the prescriptions for controlled substances.

In court documents,Walgreens pointed out that it stopped selling Schedule II drugs, which include oxycodone, methadone and fentanyl products, at eight pharmacies that were serviced by the distribution center in Jupiter.

Documents filed in the Virginia case, where Walgreens wants a judge to force DEA to return its sensitive documents, reveal more previously-unreleased details about DEA's Florida probe:

• About the time DEA targeted the Jupiter distribution center, authorities issued a second administrative subpoena, requesting data and documentation from the Walgreens Central Pharmacy Operation in Orlando. That facility primarily provides prescription fulfillment services for Walgreens' retail pharmacies, a company spokesman said.

• DEA asked Walgreens for details of all incentive programs, awards, bonuses, or additional compensation given to pharmacists, pharmacy managers and store managers pertaining to prescriptions.

• DEA asked for all emails and correspondence regarding controlled substances between Walgreens corporate, regional and district management, and all stores serviced by the Jupiter distribution center, going back to April 2010.

• DEA requested customer files from Walgreens stores on East Michigan Street in Orlando, on State Road 50 in Clermont, and Lockwood Boulevard in Oviedo.

The appeals court has not ruled on Walgreens' request to vacate the immediate suspension order, and a hearing is scheduled for Friday in the Eastern District of Virginia for attorneys to argue about the privileged materials inadvertently provided to DEA.